Moses v. Paribas

Background

The 288 plaintiffs are described as direct and indirect victims of 12 terrorist attacks in Israel from 2008 to 2016 and 51 attacks in Iraq from 2006 to 2011. They brought one claim under the Anti-Terrorism Act, as amended by the Justice Against Sponsors of Terrorism Act. That statute permits a person injured by international terrorism to seek damages from a person who aids and abets the terrorist act by knowingly providing substantial assistance.

The plaintiffs alleged that Iran’s Supreme Leader, the Islamic Revolutionary Guard Corps, Hezbollah, and related organizations used commercial fronts in Iran’s oil and gas sectors to fund terrorism. They further alleged that BNP Paribas provided financial services to Iranian entities while deliberately concealing Iranian parties from payment messages, omitting their names from transactions, and structuring payments to evade detection and U.S. sanctions.

The amended complaint identified three categories of customers: Caspian, a petrochemical company; an unnamed Iranian oil company; and other unidentified Iranian customers described in government and regulatory agreements. The complaint alleged that BNP Paribas provided at least $586 million to Caspian through letters of credit and approximately $100.5 million to the Iranian oil company in 2009. It also alleged that BNP Paribas processed at least 318 electronic funds transfers for unnamed Iranian customers in violation of U.S. sanctions.

Motions and Issues

BNP Paribas moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which addresses personal jurisdiction, and Rule 12(b)(6), which addresses whether a complaint states a legally sufficient claim. BNP Paribas argued that the claims were untimely, that the complaint did not plausibly allege the bank’s required awareness or assistance, and that the court lacked personal jurisdiction over the bank.

The court considered whether the claims were barred by the Anti-Terrorism Act’s 10-year limitations period, whether the complaint plausibly alleged the elements of aiding and abetting under the terrorism statute, and whether BNP Paribas had sufficient connections to New York for the court to exercise personal jurisdiction.

Timeliness

The court held that the claims were not time-barred. It reasoned that the Justice Against Sponsors of Terrorism Act created secondary liability under the Anti-Terrorism Act in 2016, so the plaintiffs could not have filed this type of claim before then. The court also concluded that the statute’s retroactivity provision allows claims brought within 10 years of the statute’s enactment for qualifying injuries occurring on or after September 11, 2001. The court therefore declined to preclude any claim as untimely.

Aiding-and-Abetting Claim

The court applied the framework endorsed by Congress and described in Halberstam v. Welch. Under that framework, the plaintiffs had to plausibly allege that: the person aided committed a wrongful act causing injury; the defendant was generally aware of its role in an overall illegal activity when it provided assistance; and the defendant knowingly and substantially assisted the violation.

The court treated the terrorist attacks as satisfying the first requirement. It then found that the plaintiffs narrowly but plausibly alleged BNP Paribas’s general awareness regarding Caspian and the Iranian oil company. The court relied on allegations concerning warnings and public information connecting Iran’s oil and gas industries, commercial fronts, sanctions evasion, and terrorist financing. It also considered allegations about BNP Paribas’s knowledge of the customers’ ownership and corporate connections, its compliance failures, its efforts to conceal transaction information, and its continued provision of services despite warnings.

The court reached a different conclusion for the unidentified Iranian customers. The liability agreements cited by the plaintiffs did not identify those customers or state that they were connected to terrorist organizations. Because the amended complaint supplied no information allowing the court to infer a substantial connection between those customers and the alleged terrorist organizations, the court held that the general-awareness requirement was not plausibly alleged as to them.

The court also found that the plaintiffs plausibly alleged knowing and substantial assistance as to Caspian and the Iranian oil company. It relied on allegations that BNP Paribas provided millions of dollars over several years, violated and helped customers evade U.S. sanctions, concealed transaction information, and continued providing services despite specific warnings. The court stated that these allegations described assistance that was neither innocent nor inadvertent and reflected the kind of culpable conduct covered by aiding-and-abetting liability.

The court rejected BNP Paribas’s arguments that the complaint lacked a sufficient connection to the particular terrorist attacks or that the bank’s services were not sufficiently extensive. It stated that arguments about the timing and scope of services, including the bank’s ending services to Caspian in 2012 and serving the Iranian oil company during one year, were better suited to summary judgment after discovery.

Personal Jurisdiction

The court held that it could exercise personal jurisdiction over BNP Paribas. Under New York’s long-arm statute, a defendant may be subject to jurisdiction when it transacts business in New York and the claim arises from that business. The court found sufficient allegations that BNP Paribas conducted U.S. dollar transactions through its New York branch and correspondent banks, stripped Iranian information from payment messages, and misled New York and federal regulators.

The court concluded that the allegations supported a reasonable inference that BNP Paribas repeatedly used its New York branch to facilitate transactions involving Iranian customers and used the New York banking system as an instrument for the alleged misconduct. The court therefore did not need to decide whether the complaint established other possible grounds for jurisdiction.

Disposition

The court granted in part and denied in part BNP Paribas’s motion to dismiss. The aiding-and-abetting claim survived to the extent it was based on BNP Paribas’s services to Caspian and the Iranian oil company. The court dismissed the claim to the extent it was based on services to unidentified Iranian customers. The court also held that the claims were not time-barred and that personal jurisdiction over BNP Paribas was proper. The opinion did not determine BNP Paribas’s ultimate liability.